Samples from " The World Of Money" Newsletter.

 FANNIE, GINNIE & FRIENDS

Fannie Mae (FNMA) and Ginnie Mae (GNMA) are private corporations with a unique advantage. The largest, FNMA has become a $4.5 trillion company that pumps cheap money to primary market lenders by paying cash for the mortgages which these companies originate. Once a large quantity has been accumulated, they bundle these mortgages into Mortgage Backed Securities, (MBS), for sale through securities dealers. To aid in their marketing is an implicit Government guarantee that investors will receive principal and interest payments regardless of what happens to the underlying mortgages. This transfers that risk effectively into the Treasury of the United States. According to their own financial records, Fannie Mae's loan volume grew at a compound annual rate of 13.8 percent during the third quarter of 2002. They ended the period at $1.742 trillion. But against this enormous figure, the FNMA allowance for loan losses totaled a mere $812 million as of September 30, 2002. Hardly an adequate reserve...

What is a "Dollar"?

The word "dollar" originally came from the Bohemian word "thal", which meant "valley". A silver coin was minted from the silver found in Joachimsthal, Bohemia (Joachim's Valley). The coin became known as "a thaler", which soon after became translated into English as "a dollar". During the 1700's, the Spanish produced a silver coin almost identical in size and weight to the thaler. Merchants called it the "Spanish Dollar". In 1785, Congress accepted the Spanish Dollar as the official unit of value for the United States and proclaimed that all other coins, foreign and domestic, would be evaluated in terms of the Spanish Dollar. In 1786 the Board of the Treasury officially fixed the silver content of the adopted dollar at 375.64 grains of fine silver. It was subsequently adjusted to 371.25 grains of fine silver. It is important to realize that a "note" for a dollar is not a "dollar". A dollar is a unit of measure, similar to an ounce or quart, and therefore one cannot properly claim that he has a dollar in his pocket, but rather that he has a dollar in silver or a dollar in gold, or "a one dollar note" in his pocket. Per Title 48 Stat 1730, the dollar is fixed at 15 and 5/21 grains of standard gold, and was to be maintained at this level "in perpetuity."

 WHAT DO YOU REALLY OWN?

The concept known as electronic representation of property occurs when holdings such as bank accounts or investment portfolios are reduced to mere entries in a vast computer data base. This dematerialization of wealth and assets does not occur in a time warp. Yet, this theory of abstract relativity carries very serious ramifications for the investor. Take the case of the stock market. At one point in history, stocks were owned by keeping a piece of paper with your name on it. Each time the stock was sold, the names would have to be changed. Sometimes, stocks were held “in street name” or without registration. Crooks took advantage and often many stocks were stolen. Eventually, The Depository Trust Company (DTC) was created to cure these lapses in security and ideally to solve the increased volume of....

When did the Federal Reserve acquire America's gold?

When Franklin Roosevelt issued the following proclamation: "By Executive Order of The President, issued April 5, 1933, all persons are required to deliver on or before May 1, 1933, all gold coin, gold bullion, and gold certificates now owned by them, to a Federal Reserve Bank, branch, or agency, or to any member bank of the Federal Reserve System." The important thing to note is to whom FDR was demanding the gold be delivered to. It wasn't the Treasury of the United States. It was the Federal Reserve Banks. Upon receiving the gold from the Citizens, the Federal Reserve Bank simply printed additional Federal Reserve Notes to pay for the gold.

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